Архив метки: Europe

Make Way For Another European Square: SumUp Launches With $20M+ In Backing

sumup

Add one more to the list of companies going head-to-head in the area of card payments by way of smartphone attachments: today, Berlin-based SumUp is opening up for business in the UK, Germany, Ireland and Austria, backed by an eight-figure Series A round, understood by TechCrunch to be over $20 million.

SumUp’s $20 million Series A investment comes from b-to-v Partners, Shortcut Ventures, Tengelmann Ventures and Klaus Hommels, the early Skype, Facebook and Xing investor. Before the $20 million round, SumUp had been bootstrapped by its founders, which include Daniel Klein, SumUp’s CEO, who was also one of the founders of PayPal competitor MoneyBookers (later rebranded as Skrill).

Similar to services like like Square, PayPal’s Here, iZettle, mPowa, Payleven and Intuit’s GoPayment, SumUp works by way of a free dongle that attaches to a smartphone or tablet — in its case an Android or iOS device — which can then be used with an app to read cards and take payments. And like the others, SumUp is targeting the large swathe of merchants and small businesses who currently do not have the facilities to take card payments. But if this sounds a little me-too and crowded, it’s clearly a space where investors still see a lot of opportunity for a startup to make a killing.

SumUp estimates that there are some 20 million small businesses in Europe today, but a large part of them are still only able to take payments by cash and checks because of the costs and infrastructure associated with traditional card payment services. Like others in the mobile payment space SumUp is banking on the growing uptake of smartphones — currently 32% penetration in Europe overall — and the increasing reliance on card transactions — they’re growing by 18% annually — to change that.

What is perhaps noteworthy about SumUp is that it is kicking off with a full launch — not a limited beta — in these four countries, with two of them, Germany and the UK, being some of the largest retail markets in Europe. The biggest competitor in Europe, iZettle, has up to now carved out some market share in the Nordics but is still only in beta in the UK; and of course Square and PayPal, the two biggest players in the U.S., have yet to enter the market here — although that seems to be something coming very soon.

[The launch today comes after a four-month closed beta in Germany, the UK, Ireland and Austria, which had been spotted early on by the German blog Deutsche Startups. The company has some 100 employees working in Berlin, Dublin and London.]

SumUp takes a 2.75% cut of every transaction made using its reader. It currently works with MasterCard, Visa and Europay and Stefan Jeschonnek, the MD and another co-founder, says that it’s currently in discussions with other card companies to extend that list.

You may recall that iZettle has been in a pickle in Europe over Visa cutting off its service because of the method iZettle uses to authenticate card users — iZettle requires a signature, which Visa says doesn’t meet its requirements. SumUp also takes signatures for authentication, but only on MasterCard transactions. For Visa customers get sent an SMS with a secure link, which they have to access on their devices to manually enter their full card numbers.

That sounds cumbersome, but Jeschonnek says SumUp is working on another method to speed up that process in future. “We are looking at different technology that we can use, and we are considering the chip-and-PIN solution [used by merchants who have payment terminals],” he says.

Another notable aspect of SumUp’s service is that the company is already developing the idea as more than just a point-of-sale card payment provision. Merchants have the option of using the app to preload several items that they sell, and that effectively turns SumUp into a kind of cash register.

This is, for now, limited to being used within SumUp’s own service, although Jeschonnek says it is also looking at how it might leverage APIs to offer this kind of functionality within merchant’s own apps.

“But right now we’re mainly focused on the problem of getting merchants to take cards,” he says. “We’re trying to solve a problem that still hasn’t been solved.”


Make Way For Another European Square: SumUp Launches With $20M+ In Backing

Report: Payleven, A European Square From Rocket Internet, Gets Funding From NEA, Holzbrinck, Ru-Net

payleven

With Square yet to enter Europe, there is an increasing amount of activity from would-be competitors looking to fill the same niche using dongles on smartphones to enable card payments. The latest comes from Payleven, which has picked up “tens of millions” of euros in funding from New Enterprise Associates, Holtzbrinck Ventures and the Russian VC ru-net, according to an unconfirmed report in Deutsche Startups. Payleven is part of Rocket Internet, the incubator/investment vehicle from the Samwer brothers (known for developing clones of popular U.S. services like Groupon — and then selling them as part of inorganic growth plays).

Rocket Internet is famously secretive about who invests in its projects and how much, so it’s been hard to pin this one down. The responses we’ve received have been not flat-out denials, and with a wide berth might even read them as indirect confirmations. But they’re thin on detail: “Unfortunately we cannot provide any more colour on that [news],” Holzbrinck told TechCrunch. “I think you’re very well aware of Rocket’s policy on disclosing information to the press.” ”As usual Rocket is not very open minded about publishing information about the funding,” another person close to the deal said. Rocket Internet, meanwhile, has also declined to comment directly but has opened the kimono a little to outline Payleven’s strategy going forward.

The company is already active with its payments service in Germany and Brazil.  According to Fred Klinkert, Rocket’s manager for global venture development, the plan is to expand further to “key European and large emerging markets.”

In fact, this puts the company somewhat in contrast with another Square competitor, the Stockholm-based iZettle, which last week grabbed a $31.4-million round from Greylock, MasterCard and more. Its CEO Jacob de Geer told TechCrunch at the time of the announcement that the funds would be used to expand in Europe, not elsewhere. (Square, by comparison, has raised $141 million at a $4 billion valuation.)

Meanwhile, Rocket Internet has been busy with other activity in emerging markets, an increasing focus for the company. FoodPanda, an online food ordering service, is now open for business in India, following on from FoodPanda sites in Colombia, Indonesia, Malaysia, Singapore, Thailand, Taiwan and Vietnam. Other e-commerce operations covering home furnishings (yes, Fab clones) and more are also part of the plan.

There is another area where Rocket’s Payleven stands out from Square and iZettle, and could make it one to watch ahead.

Like Square and iZettle, Payleven is largely aimed at merchants and others who have not had the facilities to process card payments at the point of sale. While Square and iZettle have spent a lot of resources encouraging merchants to sign on to their platform, Rocket Internet has a portfolio of other operations that could serve as a very immediate route to customers for Payleven’s dongles: take-out food companies (FoodPanda) and private accommodation (for its Airbnb clone Wimdu) among them.

Also, it should be pointed out that although the Samwers’ are often dismissed as clone makers, they have continued to attract not only customers, but investment and partnerships with established players. Across the markets where Payleven is already in business, it has deals with MasterCard, American Express and Eurocard (Germany) and AmEx, Diners’ Club, MasterCard and Visa (Brazil). Their Wimdu venture has had $110 million in backing so far, Deutsche Startups points out.

NEA has not yet responded for this story, but there is a past connection between the company and Rocket.

NEA was one of the earliest investors in Groupon, a company that also bought one of the Samwer brothers’ previous ventures, CityDeal, and subsequently put brothers Oliver and Marc Samwer in charge of the European operation — a position that has only changed in the last couple of months, with the brothers stepping down from their managerial roles and getting replaced by an ex-Dell executive Veit Dengler, who is now SVP in charge of Europe, based in Austria.


Report: Payleven, A European Square From Rocket Internet, Gets Funding From NEA, Holzbrinck, Ru-Net

Focus Squarely On Europe, Mobile Payments Startup iZettle Gets $31.4M From Greylock, MasterCard & More

izettle updated pic

Just days after releasing an API to integrate its payment platform into third-party apps, iZettle, known as the “Square of Europe” for its dongle-based iOS mobile payment system, has even more news: it has just completed a  €25 million ($31.4 million) Series B round of funding as part of its bid to become the biggest mobile payments platform in the region. The round was led by new investors Greylock Partners and Northzone, with participation from others — including the eye-catching news that payment giant MasterCard is now an investor — along with other new backer SEB Private Equity, and previous investors Index Ventures and Creandum.

The funding takes the total investment in the company to $46.7 million, and Jacob de Geer, iZettle’s co-founder and CEO, says it will be used for product development, and to continue to build out its mobile payments service in Europe — currently available in Scandinavia and trialling in the UK. “Our priority is to get the UK fully launched, and then look at other major markets like Spain, Italy, France and Germany to continue building up our transaction volume,” he told TechCrunch in an interview. “We’re not interested in the U.S. They’re doing really well with Square and others.”

Since starting its first services in its home market of Sweden in August 2011, iZettle has picked up 50,000 merchants using its system — a far smaller number than the 2 million milestone revealed yesterday by Square. But iZettle says that potentially there are 20 million merchants in Europe — that’s the number who currently do not take card payments for their services, putting to one side targeting those who already can — who could be using its service to accept card-based payments.

In its focus on Europe, iZettle is going after a market that has yet to be tackled by PayPal’s Here (although it is looking at other payment routes), or Square (which is reportedly looking to enter Europe itself); but that does have others also looking to do more dongle-based mobile payments: they include mPowa, and a Square clone from the Samwer brothers that may be called PayLeven (that would be its third re-branding and the Samwer’s investment vehicle Rocket Internet has so far declined to comment to TechCrunch about what its strategy is in the venture — we’re asking again now).

iZettle is not disclosing its valuation on the back of the funding news today. Square, by comparison, has raised $141 million to date and has a valuation of $4 billion.

Unlike other dongle-based mobile payment services like Square and PayPal’s Here which use a card’s swipe strip for processing, iZettle has focused on transactions (each charged a flat 2.75% commission on MasterCard, Visa and Diners Club; 3.75 for AmEx) using chips embedded in the cards: chips are now ubiquitous in Europe and are considered more tamper-proof than the strips. De Geer believes that will help the company bring on both more merchants and consumers to the service as it looks to take its offering mass market. “Security comes built into that,” he says.

Its unique IP — an interesting mix of software technology with hardware thrown in — is also what has attracted this latest round of investment.

“iZettle is the first and only company to develop an affordable chip-card reader and app for smartphone-based mobile commerce that meets all of the rigorous international security requirements,” Laurel Bowden, Greylock’s partner in London who is joining iZettle’s board of directors, said in a statement. “They’ve proved they’re ready to step up their game in this very complex and competitive industry.”

The fact that iZettle is based around the chip technology, and that it has a firm commitment to becoming the name synonymous with mobile payments in Europe, makes the company also potentially interesting as either a partner, or even an outright acquisition target, for those larger U.S.-based payment companies that are looking for a way of entering a new market.

De Geer says that the company has already even engaged in those kinds of conversations on a casual basis — but he emphasizes that nothing has advanced into more serious negotiations yet. “It’s not something that we’ve been pursuing actively at this point,” he says.

Aside from building its own user footprint and partnering with other, complementary mobile players, there is another direction that iZettle is likely to explore in the future: the idea of linking up its payments services with other parts of the mobile payment ecosystem, which includes services like product discover, customer loyalty programs, and other rewards services: after all it’s a natural progression to take a consumer from one function to the other, and it makes it much more likely that the consumer will complete transactions if you make it as easy as possible for him to do so.

iZettle has an interesting arrangement that could point to its first partner in such a new venture. It actually shares a Stockholm office with Wrapp, the mobile gift card aggregator that recently entered the U.S. market and has similar ambitions to become the default service of its kind across Europe.

“We are very interested in what Wrapp does in terms of gift cards. They are really disrupting with the gift card market, and that’s all they focus on so that makes them a good partner for what we could do,” says de Geer. “At the end of the day, for all of us, it’s all about adding value for our merchants.”


Focus Squarely On Europe, Mobile Payments Startup iZettle Gets $31.4M From Greylock, MasterCard & More